The Winklevoss Bitcoin ETF was rejected, but VanEck ETF has the opportunity to be approved

As a result of the decision of the United States Securities and Exchange Commission UU (SEC) to refuse the Bitcoin ETF application of Winklevoss, investors in the panicked cryptocurrency market, then the price of bitcoin has fallen below the $ 8,000 threshold.

The decision, which was first reported by CNBC, is derived from a publicly published document that explains its decision to deny the application.

The reasoning of the SEC on the failure of Bitcoin ETF

A widely recognized cryptocurrency researcher, better known for the management of @AureliusBTC, decomposed the complex application, offering a well-reasoned explanation of this that has happened and how that could affect future applications.

Aurelius began with an explanation of Winklevoss ETF's proposal, explaining his intentions:

"The goal of the Winklevoss ETF, was to do the following:

ETF would keep BTC place purchased via Gemini.

NAV would be based on

Each share was set at a value of 0.01 BTC. "

In the application, filed by Bats BZX Exchange , Inc. (BZX), the plaintiff asked for permission to quote and trade shares of the Winklevoss Bitcoin Trust, which would exchange at 0.01 BTC based on the NAV rates of the company. Gemini exchange of twins.

As Aurelius explained, "the main reason for the rejection was that the market had too much potential to be manipulated at The SEC does not comply with the requirements of the Exchange Act."

The SEC has implemented the Securities Market Act in 1934 to ensure financial transparency and reduce the risk of fraud and fraud. Manipulation Since the pricing model of the proposed ETF would be based on exchange rates, there is an inherent risk of manipulation arising from trading algorithms and "whales". Where they exist but everyone wants to ignore them, they are the real winners, in the manipulation of the market.

The fact that prices are based solely on Gemini rather than on global markets also proved to be a problem in the application. The SEC cited several application comments that questioned Gemini Exchange's liquidity, prices, and trading volume. The request stated:

"Many commentators claim that the Gemini Exchange has low trading volumes, and one commenter states that Gemini has the worst price for all trades. relatively low liquidity and trading volume, and there is a significant risk that the nominal FTE price will be manipulated by relatively small operations that manipulate the price of bitcoin on that exchange. , while bitcoin exchanges in the US UU They are subject to stricter rules and audits for the keeping of customer accounts, the trade itself seems to be occurring in a regulatory vacuum and it seems impossible to 39, to carry out an effective verification. "

Another interesting point in the presentation of SEC Gemini, stating:

" The record does not indicate that the Géme Stock Exchange is a "regulated market" comparable to a national stock exchange or futures exchanges associated with the underlying assets of the commodity trust FTEs. approved to date. Although the Gemini Exchange was "regulated", the register does not support the discovery that the Gemini Exchange represents a "significant" bitcoin market.

The SEC also questioned the impact of the WEC futures markets. / CBOE in handling, saying that they are not important enough to import to the market. The statement states in part, "On the basis of the context, the Commission concludes that BZX has not established that it has entered into or may enter into a shared supervisory agreement with a significant regulated market of significant size. to bitcoins. "

Aurelio concludes his analysis of the decision by a summary, stating:

"SEC believes that the spot market has too much potential for manipulation.

Affirms that it does not not enough to use Gemini It states that: "(No) the current marketplace in the global bitcoin spot market is a regulated market."

Aurelius also explained the significant differences between Winklevoss's proposals and VanEck / SolidX, and noted:

"The Winklevoss ETF was available to retailers because it was set at 0.01 BTC per share, which made it less likely to be approved. VanEck's proposal states that each action is worth 25 BTC, which limits access.

Investor access to products is an essential element of the SEC's decision, since its primary purpose is to protect shareholder rights. dishonest investors of hazardous investments. Having a high price will limit access to wealthy investors who meet the requirements of SEC accredited investors.

In addition to the high price of the action, the pricing model of the VanEck proposal will be based As remarkably remarked Aurelius, the Tether controversy was also cited as a concern at the launch of the SEC: [19659002]the Commission notes that recent academic work suggests that the price of bitcoin can be manipulated and manipulated through activities in bitcoin malls. A recent academic article has examined whether the growth of Tether's current offer through new issues "is primarily driven by investor demand or is provided to investors as a system to benefit from the rise in cryptocurrency prices"

The price of Bitcoin reached a low of $ 7.848 in Coinbase after the decision and it is quoted at $ 7.883 at the time of writing this article, that is, the price has very little changed after the SEC information. ] Reference: newsbtc.com

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